Power Your Business with the Growth Guarantee Scheme

The Growth Guarantee Scheme (GGS) is a UK government-backed initiative launched in July 2024, succeeding the Recovery Loan Scheme. It is designed to support access to finance for UK smaller businesses as they look to invest and grow. The scheme offers a range of financial products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending, with the aim of improving the terms on offer to borrowers. If a lender can offer a commercial facility on better terms, they will do so.  

No, the Growth Guarantee Scheme is not a government grant. It is a loan guarantee scheme backed by the UK Government, designed to support access to finance for UK small and medium-sized businesses. Under the scheme, accredited lenders provide business loans, and the government offers a partial guarantee of up to 70% to the lender — not to the business. This means businesses remain fully responsible for repaying the loan, just as they would with any standard finance agreement.

Yes, the Growth Guarantee Scheme is specifically designed to facilitate access to finance for small businesses seeking to invest and expand. By providing a government-backed guarantee, the scheme enables lenders to offer financial products that might otherwise be unavailable or on less favourable terms, thereby supporting business growth initiatives.

To qualify for the scheme, businesses must:

• Have a turnover of up to £45 million.

• Be UK-based and engaged in trading activity, generating more than 50% of income from trading (with exceptions for charities and further education colleges).

• Not be classified as a business in difficulty, including not being in relevant insolvency proceedings.

• Meet the lender's viability assessment.

• Ensure that receiving the GGS facility will not cause them to exceed the maximum subsidy limits allowed over a rolling three-year period.

The scheme can generally support facility sizes of up to £2 million per business group. For borrowers within the scope of the Northern Ireland Protocol, the maximum facility size is £1 million, with lower caps for certain sectors such as agriculture and fisheries.

Yes, the Growth Guarantee Scheme (GGS) is the successor to the Recovery Loan Scheme (RLS). Both initiatives are designed to support UK smaller businesses in accessing finance, but they have distinct features and purposes.

Recovery Loan Scheme (RLS):

• Purpose: Introduced to provide financial support to businesses affected by the COVID-19 pandemic.

• Duration: The RLS was available until 30 June 2024.

• Features: Offered government-backed guarantees to lenders to encourage them to provide loans and other types of finance to businesses impacted by the pandemic.

Growth Guarantee Scheme (GGS):

• Purpose: Launched on 1 July 2024, the GGS aims to support UK smaller businesses as they look to invest and grow, beyond the immediate impacts of the pandemic.

• Features: Provides a 70% government-backed guarantee to lenders on eligible loans. It supports a wide range of products, including term loans, overdrafts, asset finance, invoice finance, and asset-based lending.

• Facility Sizes: Generally supports facility sizes of up to £2 million per business group for borrowers outside the scope of the Northern Ireland Protocol, and up to £1 million for those within its scope.

• Eligibility: Open to smaller businesses with a turnover of up to £45 million. Businesses must be UK-based, engaged in trading activity, and meet the lender's viability assessment, among other criteria.

In summary, while both schemes aim to facilitate access to finance for UK businesses, the RLS was specifically designed to address challenges arising from the COVID-19 pandemic, whereas the GGS focuses on supporting business investment and growth in the post-pandemic period.